The Pension Fund Committee of Lancashire Council met on Friday 20 March 2026 to approve the Lancashire County Pension Fund's strategic plan for 2026-2029 and its budget for 2026-2027. The committee also approved a revised Funding Strategy Statement and noted updates on governance matters, responsible investments, and pension administration performance.

Lancashire County Pension Fund Strategic Plan 2026-29 and Budget 2026-27

The committee approved the draft three-year strategic plan for the Lancashire County Pension Fund (LCPF) for 2026-2029 and the operating budget for 2026-2027. The strategic plan outlines objectives across four workstreams: Governance and Finance, Investments, Administration and Employer Risk, and Shareholder responsibilities. The 2026-27 budget reflects a 10.8% reduction on the previous year, largely due to reduced actuarial work and economies of scale from the expansion of Local Pensions Partnership Investments (LPPI).

Councillor S Roylance raised a question regarding the general inflation assumption of 3.2%, asking if it was realistic given the ongoing conflict in the Middle East and its impact on fuel prices. Pete, the Head of Fund, acknowledged that inflation indicators suggested an increase in the short term and stated that this would be monitored, with a report back in the mid-year budget review. However, he did not propose any adjustments at this stage.

Review of Funding Strategy Statement

The committee approved the revised Funding Strategy Statement (FSS), which incorporates parameters agreed in January 2026. These parameters include a funding buffer of 115%, a recovery period of 20 years, and specific discount rates for past and future service. The FSS also consolidates related policies, including those on admissions, terminations, employer risk, and asset sharing.

Lancashire County Pension Fund Governance Matters

Pete, the Head of Fund, presented a standing report summarising governance and risk items. He confirmed that the fund's financial statements for 2024-25 had been approved by external auditors and that the fund's assessment was compliant with The Pensions Regulator's General Code of Practice. An updated breaches policy was presented for approval, and the report noted that no material breaches had been reported to the Pensions Regulator in the past year. The risk register had not seen any changes in the quarter, but a new risk associated with preparations for local government reorganisation will be introduced from the next quarter.

Councillor Prof. Michael Lavalette questioned the lack of change in the risk register despite events in the Middle East. Pete explained that while global stock markets had seen a reduction, the fund's defensive nature had resulted in a smaller decrease in its assets. He also noted that gilt yields had increased, decreasing liabilities, leading to a relatively constant funding level. He assured the committee that risks would continue to be monitored and reflected in future reports.

County Councillor Andy Blake discussed the fund's investment in global equities and the potential for investing more in the region and Britain. He also raised the question of whether pension fund members were consulted on investment preferences. Pete confirmed that a review of the investment strategy statement would be brought to the next committee meeting, which would incorporate these considerations.

Fit for the Future - Governance Arrangements

The committee received an update on governance arrangements stemming from the 'Fit for the Future' programme. This included enhanced skills and knowledge requirements for all involved with the pension fund, confirmation that the Head of Fund would act as a Senior LGPS Officer from April 2026, and the appointment of an independent person with a wider remit across investments, governance, and administration.

Pete explained that the requirement for enhanced skills and knowledge extends to substitutes at Pensions Committee meetings. He also proposed rescinding the December decision to appoint a second Independent Investment Adviser and instead appointing a single Independent Advisor with a broader remit covering investments, governance, and administration. Councillor S Roylance inquired about potential recruitment challenges for this role, to which Pete responded that while such individuals are rare, he was confident a suitable candidate would be found. Fiona Miller noted that the bill and regulations were not expected to be in place by April 1st, but that material changes were not anticipated.

The committee approved the recruitment of an Independent Advisor and recommended that Full Council amend the committee's terms of reference to reflect a single Independent Investment Adviser.

Pension related training, 2025/26 Training Record and Training Plan 2026/27

Pete presented a routine update on members' training, including the annual record for 2025/26 and the training plan for 2026/27. He thanked members for their continual engagement in training. Councillor J Tetlow noted an omission from the training record regarding a governance conference in Cardiff, which was acknowledged and amended. Councillor M Smith inquired about the completion of LOLA modules, and it was confirmed that while some members had completed them, others had not. Councillor County David Shaw suggested including members who had completed courses in the list to identify potential deputies.

The committee noted the training record and approved the training plan for 2026/27.

Lancashire Local Pension Board Workplan 2026/27

Pete presented the Lancashire Local Pension Board's annual work plan for 2026/27. The plan, developed in consultation with Fiona Miller, Chair of the Board, outlines key areas of focus including policy reviews, pensions administration services, and updates on Local Government Reorganisation (LGR). The committee noted the work plan.

Responsible Investments Report

This report provided LPPI's quarterly responsible investment update for Q4 2025. Notable activities included a significant UK housing acquisition programme and confirmation of signatory status to the UK Stewardship Code.

Chris from LPPI highlighted the acquisition of PRS Holdco, which brings over 5,000 homes under ownership with plans to increase this to 15,000 over the next decade. He confirmed that approximately 270 of the existing homes are in Lancashire, with expectations of new investments in the region.

Councillor Matthew Brown raised the issue of social and affordable housing, referencing an investment by the Co-op Pension Fund. Chris confirmed that LPPI had also made a £50 million investment into a social housing fund, though it was not Lancashire-focused.

Councillor Rick Edwards expressed concerns about the potential for housing developments to stall due to a lack of buyers, and the profitability of building expensive homes versus affordable housing. Councillor Lavalette questioned the proportion of houses in Lancashire resulting from the £50 million investment, and Chris clarified that the primary objective of the investment was risk and return, with diversification across the UK. Miss George added that the fund had invested in 69 units in Lancashire within a national fund, and that the chosen fund manager had expertise in the area.

The committee noted the report.

Pension Administration Performance Update

This report provided an update on administration services delivered by LPPA for the period October to December 2025. Overall casework performance exceeded the SLA target at 99.1%. However, employer retirement notifications received on time decreased to 53.6% in Q3, impacting the timeliness of first pension payments. LPPA is working with employers to improve this, and a new leaver notification form has been launched.

Miss Roylans questioned the decrease in timely retirement notifications. Joel Michael Tetlow explained that volumes can be volatile and influenced by seasonal factors and member notification timing, and that LPPA is exploring international best practices to improve this. Miss Easton inquired about a significant reduction in deferred benefits cases, and Joel Michael Tetlow explained this was due to automation and a dedicated team focused on pending leave cases ahead of the valuation.

The report also noted a reduction in complaints received and a slight decrease in customer satisfaction scores for active and deferred retirements, though contact centre satisfaction remained high. PensionPoint registrations are steadily increasing. Updates were provided on ongoing projects including the McCloud Remedy, Pensions Dashboard, and regulatory changes.

The committee considered and commented on the update, noting that Service Level Agreements had been met.

Urgent Business

No urgent business was raised.

Date of Next Meeting

The next meeting is scheduled for 19 June 2026. Mike confirmed that the start time would be 10:00 am, a change from the previously stated 10:30 am, to accommodate members with employment outside the council.

Exclusion of Press and Public

The committee agreed to exclude the press and public for the remainder of the meeting.